A Jumbo Loan is a type of loan that exceeds the standard limits for conforming loans. A conforming loan meets certain guidelines as set forth by Fannie Mae and Freddie Mac.
The best-known of these guidelines is the size of the loan; in most counties in the United States, the current maximum size of a conforming loan is $417,000.
Jumbo loans are too large to meet the guidelines of a conforming loan.
For example, if you are buying a home in a county in which the conforming loan limit is $417,000, and you are taking out a single mortgage for $500,000, you’ll need a jumbo loan. Jumbo loans may have a fixed or an adjustable interest rate.